ATLANTA -- The demand for commercial and industrial loans at banks across the country has ranged from flat and declining to strong and competitive since August.

Banks provided their assessment of C&I loan activity in the Federal Reserve Board's Summary on Commentary of Current Economic Conditions released Nov. 29. Commonly known as the "Beige Book," this report is published eight times per year.

In the Fed's Cleveland-based fourth district, commercial and consumer loan demand has been flat to declining for most banks since early October. Several bankers are concerned about small increases in delinquencies, but credit quality remains relatively strong, according to the Fed. The consensus outlook by district bankers is for a continuation of tight margins and a modest deterioration in credit quality.

The demand for commercial loans held firm in October and November for banks in the Richmond, Va.-based fifth district. A Charleston, S.C., banker noted that his bank was more carefully scrutinizing "the type of properties receiving loans, but not applicants," the Fed said. Little change was reported in interest rates or the rates of delinquent loans since the October issue of the Beige Book.

Southern Louisiana has experienced a stronger demand for commercial and industrial loans compared to other banks in the Atlanta-based sixth district, which reported a slowdown. On the flip side, deposit growth has been strong for some banks while others observed flat to slow growth in October and early November. Still, credit quality has remained strong across the region, the Fed reported.

In the Chicago-based seventh district, commercial lending conditions continued to be competitive and interest rate margins remained narrow. One banker noted that commercial real estate borrowers were starting to seek interest-only and other alternative loan structures. Commercial credit quality remained in good shape, with steady ratios of non-accruing loans. Business loan demand was flat while lending for equipment and inventories remained steady, but real estate lending leveled off following a period of solid gains, according to the Fed. A banker in the Chicago area said that institutional real estate investors remained active, though there had been some slowdown by smaller investors.

From August to October, credit standards and demand for commercial and industrial loans remained unchanged for both large and small firms, banks in the St. Louis-based eighth district reported. During the same period, credit standards for commercial real estate loans tightened somewhat, while credit standards for residential mortgages and consumer loans remained basically unchanged. Demand for commercial real estate and consumer loans remained unchanged, while demand for residential mortgages was moderately weaker.

Because commercial lending continues to be "very good" for banks in the Dallas-based eleventh district, competition for experienced and talented lenders continues to be "intense," the Fed noted. Despite a slowdown in nearly all consumer loans, credit quality has been "good" and mortgage delinquencies do not appear to be a problem for district lenders.

In the San Francisco-based twelfth district, further growth in commercial and industrial loans continued to offset declines in residential mortgage originations. Demand for consumer loans fell slightly in some areas, but remained relatively strong. Credit quality was high in general with few delinquencies. However, contacts provided scattered reports of delinquencies on loans to homebuilders, and banks have increased their vigilance over these loans. Venture capital and private equity financing reportedly remained on a modest, but steady growth path. --msamaad@cutimes.com